UK factories experienced an uptick in activity during January with output and demand both on the increase.

According to monthly index by Markit for the Chartered Institute of Purchasing and Supply (CIPS), input costs fell at their fastest rate since May 2009, driven by the plummeting cost of oil.

The sector registered an index score of 53 last month, where anything above 50 denotes expansion, up from 52.7 in December.

The figure was also much higher than the long term trend of 51.5.

Delving deeper into the detail, much of the demand continues to be driven by domestic orders, although overseas markets also registered higher activity levels.

“The domestic market remains the main growth driver, as the UK economic recovery provides a steady stream of new business,” said Rob Dobson, senior economist at Markit.

“There were also signs of improvement in overseas markets, with new export orders posting the first meaningful gain for five months, but it still looks as if lacklustre demand from the eurozone in particular remained a headwind for British manufacturers.

“This could soon change, however, if quantitative easing by the ECB has the desired effect of boosting demand in the euro area.”

Dobson added that manufacturing’s strong performance meant businesses were continuing to take people at the rate of about 5,000 recruits per month.